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The IRS Modernized e-file system for tax-exempt organizations will not be available from Jan. 1, through Feb. 29 for electronic filing of Forms 990, 990-EZ, 990-PF and 1120-POL information returns. The Internal Revenue Service is suspending the availability of the system to implement changes to IRS systems for the 2011 tax year. The 990-N e-postcard filing system will not be affected by the temporary suspension of the MeF system.
To minimize the impact on affected organizations, the IRS is granting an extension of time to file to March 30 to organizations whose due date or first extended due date is Jan. 17 or Feb. 15. Organizations required to file electronically may file electronically before Jan. 1 or between March 1 and March 3. Affected organizations that are not required to file electronically may do the same and, alternatively, may file a paper return before March 30. In addition, certain affected organizations normally required to file electronically will have the option to file a paper return during the suspension period.
An affected organization that has not previously received an extension and wishes to extend its filing due date until after March 3 may request an automatic three-month extension by filing Form 8868, Extension of Time to File an Exempt Organization Return, by its original due date. If an affected organization already obtained an automatic three-month extension, the IRS will grant the organization an additional three-month extension if the organization files Form 8868 by its first extended due date. Organizations that already were granted two extensions for a total of six months may not request a further extension.
Organizations are reminded that an extension of the time to file, including the automatic extension to March 30 provided in the notice, is not an extension of time to pay any tax liabilities that may be due for the year.
Organizations with a filing due date (or first extended due date) between Jan. 1 and Feb. 29 that file their returns by March 30 will be considered to have timely filed. In the case of an organization with a second extended due date that falls during the suspension period, the organization will have reasonable cause for late filing and will not be subject to late filing penalties if it files by March 30. The organization should attach a Reasonable Cause Statement to its return referencing Notice 2012-4, to avoid receiving a system-generated late filing penalty notice from the IRS. An organization generally required to file electronically that has already obtained two three-month filing extensions may be uncomfortable with taking advantage of the late filing penalty relief provided in the notice. In that circumstance, the organization may file its return on paper.